.avif){kind=logo}
Every BC strata corporation has a contingency reserve fund (CRF) by law. How much is in it, and how it's planned, varies enormously between corporations. The 2024 depreciation report rules make the gap visible.
The legal minimum
The Strata Property Act sets a minimum: if your CRF balance is less than 25% of the previous year's operating budget, you must contribute at least 10% of the operating budget annually until the CRF reaches that 25% threshold. If your CRF balance is at or above 25%, there's no statutory minimum contribution.
The depreciation report target
The depreciation report is the working substitute for adequate reserve planning. Most reports include: minimum funding (meets legal minimum); cash flow funding (matches contributions to projected expenditures year by year); threshold funding (maintains a minimum balance throughout the 30-year horizon); fully funded (maintains 100% of accrued component depreciation).
Most well-run BC stratas target threshold funding or fully funded. The contribution math typically translates to annual reserve contributions of $1,500–$3,500 per unit for older buildings, less for newer ones.
How to translate the report into action
1. Choose a funding model
Reflect: owner appetite for higher fees vs. future levies, the building's age and component risk profile, the corporation's borrowing capacity, the market context.
2. Build it into the budget
The annual operating budget should include the CRF contribution as a discrete line. Owners see and vote on it explicitly at the AGM.
3. Communicate the plan
An owner who understands why their reserve contribution is going up by $40 / month is far less hostile than one who sees the increase without context.
What's actually in the CRF
The CRF is held in a separate trust account, with its own ledger. It can be invested in federally-insured deposit accounts, term deposits/GICs, bonds with appropriate ratings, or money market instruments. Cannot be invested in equities, equity mutual funds, or real estate.
In 2026's interest rate environment, well-managed CRFs are earning 4–5% in laddered GICs.
When a levy is unavoidable
Common drivers: major repair sooner than the depreciation report anticipated; new code requirements; buildings that started behind on reserve funding.
For the special levy mechanism itself, see our special levies guide.
Common reserve fund mistakes
- Treating the depreciation report as one-time work
- Funding only to the legal minimum
- Letting interest sit in low-yield accounts
- Skipping the funding-model conversation
- Treating the CRF as a slush fund
For the broader financial picture, see our guide to reading strata financial statements and the maintenance and financial planning guide.